1. Martha is investing $5 today at percent interest so she can have $10 later. The $10 is referred to as the: A. future value. B. present value. 2. By definition, a bank that pays simple interest on a savings account will pay interest: A. on both the principal amount and the reinvested interest. B. only on the principal amount originally invested. c. only at the beginning of the investment period. 3. Tom earned $120 in interest on his savings account last year. Tom has decided to leave the S120 in his account so that he can earn interest on the $120 this year. This process of earning interest on prior interest earnings is called A. Compounding. B. Discounting. 4. Sue needs to invest $3,626 today in order for her savings account to be worth $5,000 six years from now. Which one of the following terms refers to the $3,626? A. Future value B. Present value 5. Todd will be receiving a $10,000 bonus one year from now. The process of determining how much that bonus is worth today is called: A. Discounting. B. Compounding